Wall Street opens lower as dollar hits 8-year high against the yen
U.S. stocks recorded their steepest fall in three weeks in morning trading on Tuesday as positive economic data added to the gains in the dollar and sent it soaring to a one-month high.
The dollar was hovering at an eight-year high against the yen JPY= and a one-month peak against a basket of other big currencies .DXY.
“A strong dollar is going to hurt exports and the revenue line of companies, which wasn’t strong to begin with,” said Rick Fier, director of trading at Conifer Securities in New York.
The overall economy is gradually firming, with reports on Tuesday showing business investment spending plans increasing solidly in April, consumer confidence perking up this month and house prices extending gains in March.
The buoyant data comes after Federal Reserve Chair Janet Yellen said on Friday that the central bank could raise interest rates this year if the economy keeps improving as expected. The comments kept the likelihood of a September rate increase high.
Yellen’s comments and the dollar’s rise pushed the monthly gain for each of the three major U.S. stock indexes to below 2 percent in the past two trading sessions.
At 11:01 a.m. ET (1501 GMT) the Dow Jones industrial average .DJI was down 183.94 points, or 1.01 percent, at 18,048.08, the S&P 500 .SPX was down 20.4 points, or 0.96 percent, at 2,105.66 and the Nasdaq Composite .IXIC was down 57.53 points, or 1.13 percent, at 5,031.83.
All 10 major S&P 500 sectors were lower in early trading, with the materials index’s .SPLRCM 1.24 percent fall leading the way.
Apple (AAPL.O) fell 1.2 percent to $130.88 and was the biggest drag on the S&P 500 and the Nasdaq.
Charter Communications’ (CHTR.O) shares were down 0.8 percent to $174.15 after it agreed to buy Time Warner Cable (TWC.N) for $55.8 billion. Time Warner Cable rose 3.9 percent to $177.99, well below Charter’s cash and stock offer of $195.71.
